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Stone Works is a paving stone installation business that operates from about April to October each year. The company has an outstanding reputation for the quality of its work and as a result pre-books customers a full year in advance. Customers must pay 40% at the time of booking and the balance on the completion date of the job. Stone Works records the 40% cash advance received from customers in the Unearned Revenues account. The December 31, 2020, balance sheet shows Unearned Revenues totalling $209,000. During 2021, $324,000 of cash was collected in total from customers: $228,000 regarding work completed during the year for customers who paid 40% down in 2020, and the balance representing the 40% prepayments for work to be done in 2022.
Problem 1. Prepare the entry to record the collection of cash in 2021.
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